How To Build Credit For Your Business
Below is the BEST Resource I have found for creating and maintaining Business Credit:
The Official Business Credit Building Checklist
Every highly successful business in the United States has established business credit. Many of the largest businesses in the world such as Walmart even used their business credit to get as big as they are. As essential as business credit is for a company to have real success, many entrepreneurs still are unsure how to establish their business credit.
This checklist will help you build business credit linked to your EIN , not your SSN . Much of this credit is available to you with no personal credit guarantee and you can get it quickly. Plus, per SBA business credit card limits are typically 10 – 100 times higher than consumer credit, thus giving you the ability to grow and scale your company quickly. While building your business credit use this checklist to ensure you get the credit you deserve with no headaches along the way.
Step 1- Credibility
Building your credibility is essential to getting approved for business credit. When you ensure your business is set up to be fundable per creditor standards, you will know you can get approved for business credit before you even apply. Here are the essential credibility requirements you must meet to get approved for most business credit:
- Business Name: You must use the company’s full legal name including DBAs. It must match the name exactly as listed on the corporation records.
- Business Licenses: You must have proper licensing as required for your industry and your state.
- Federal EIN: Your Employer Identification Number filing must match your state filing exactly.
- Physical Address: The business needs its own physical address, do not use a home address, P.O. box, or UPS box.
- Separate Business Phone: Your business must have its own phone number. It must be a real business or VOIP number not a mobile or home phone.
- 411 Directory: Business phone number must be listed with 411 under the exact business name you are using on your application.
- Business Website: You will need a professional business website that properly reflects your brand.
- Professional Email: You must have a professional business email address not an AOL or Gmail-type email.
- Public Records: There can be no liens, judgments, or liens pendens against the business
Step 2- Business Credit Reports
One secret of building business credit that few entrepreneurs know is that to move to each stage of the process you must have a certain amount of tradelines established, which are also known as payment experiences. For example, to get approved for revolving business credit store cards you must have five payment experiences reporting to the business credit reporting agencies. While to get approved for cash credit such as Visa cards will require a total of 10 payment experiences. For you to successfully build your business credit you should have access to some, if not all, of your business credit reports. In doing so you can watch your credit building in real-time, and you can see when new payment experiences report prompting you to move to the next building stage such as getting store or cash credit.
Make sure you follow these steps to obtain your business credit reports:
- Almost every credit issuer will ask for your DUNS number on the application, so getting this set up is the first and most important step, and it is FREE to do. Get your DUNS Number from Dun & Bradstreet (D&B) by Clicking Here: https://www.dnb.com/duns-number/get-a-duns.html D&B is the biggest of the three major business reporting agencies, so you should get set up with them above all others. Get access to your D&B business credit reports by Clicking Here: https://www.creditsuite.com/monitoring/
- Experian is the second most popular reporting agency, it is not essential to get your monitoring set up with them but considering many creditors do report to them, it is a good idea. Get access to your Experian business credit reports by Clicking Here: https://www.creditsuite.com/monitoring/
Very few credit issuers use Equifax, and even fewer creditors report to them. Get access to your Equifax business credit reports by Clicking Here: https://www. creditsuite.com/monitoring/ IMPORTANT NOTE: When you enroll for D&B credit monitoring, you’ll often get a call from Dun & Bradstreet Credibility trying to sell you their “credit builder” program. You do NOT need this credit builder, it only adds references to your report and won’t get you access to real useable credit.
Step 3- Getting Approved for Vendor Credit
Almost all business credit profiles get started with vendor credit. This is credit offered by vendors to business owners that reports to the business credit reporting agencies. It is important to note that over 90% of trade credit, or vendor credit, reports to the reporting agencies. So, it is essential that you verify with the source that they do report before applying.
This checklist will help you check off items that are needed to build business credit, but this is not a full guide on how to build business credit. So you will need to do some research on your own to locate vendors that work for you, or consider getting professional guidance and help building business credit here https://www.creditsuite.com/business- credit.
Here is a checklist of what you will need to get approved for initial vendor credit:
Locate 3-5 vendors which report to the business credit reporting agencies.
Apply for vendor credit with them without supplying your SSN. Many will ask for this, but if you have some credit established or buy products initially from them, in most cases you can get approved without supplying your SSN.
Some sources will give you 30 day net terms if you just buy their product.
Use your newly approved credit to buy items from that vendor for $50 or more.
Pay your bill timely, preferably early. Your business credit scores look mostly at how you pay the bill, early or late. Make sure to pay your bills as soon as your bill is received.
Check your business credit reports to ensure your new accounts are reporting. D&B claims this can take between 1-3 reporting cycles, or 30-90 days. Monitor your reports until you verify your new items are reported.
Establish three payment experiences. A payment experience is the reporting of an account to one reporting agency. You will need a total of five reported payment experiences to start getting approved for store credit.
Step 4- Getting Approved for Store Credit
One of the biggest benefits of business credit is that you can use it to get approved for real revolving credit at most major stores. Most major retailers offer business credit linked to your EIN not your SSN.
To get approved you will first need to have an established business credit profile and score. This is why you took the prior step and established your vendor accounts. Once you have done this, you will have reported payment experiences, have an established score, and an established profile you can use to start to get revolving business credit. Remember, this checklist will help you check off items that are needed to build business credit, but this is not a full guide on how to build business credit. So you will need to do some research on your own to locate stores to apply with and their approval requirements, or consider getting professional guidance and help building business credit here https:// www.creditsuite.com/business-credit.
Here is your checklist of what you will need to start to secure revolving store credit:
Ensure you have five payment experiences reporting to the business credit reporting agencies.
Ensure you have an established business credit profile and score with at least D&B and Experian.
Locate stores where you want to apply for credit.
Contact them by phone, or check their website, and find out how to apply for each source to get credit for your business.
Do research, even ask each source if they know what is needed or required for approval. Many will require that you have an established business credit profile and good score for approval, which you did in the prior step.
Complete the store credit business application and leave your SSN off of the application. Please note, ALL applications will ask for your SSN. But with established business credit they will pull your EIN credit instead, and if it meets their requirements then they will approve you anyways, without your SSN even being supplied, which means there is no personal guarantee offered.
Purchase their products using your newly established business credit accounts.
Pay your bill timely. Remember, your business credit scores look mostly at how you pay the bill, early or late. Make sure to pay your bills as soon as your bill is received.
Check your business credit reports to ensure your new accounts are reporting. D&B claims this can take between 1-3 reporting cycles, or 30-90 days. Monitor your reports until you verify your new items are reported.
Establish a total of 10 payment experiences, including vendor and revolving credit. Remember, a payment experience is the reporting of an account to one reporting agency. You will need a total of 10 reported payment experiences to start getting approved for cash credit.
Step 5- Getting Approved for Cash Credit
One of the main goals of establishing business credit is that once established you can use it to get cash credit such as Visa and MasterCard accounts. Once you have followed the proper building steps it is common to be able to secure $5,000, $10,000, or even higher individual credit cards for your business, cards you can use mostly anywhere.
Here is your checklist of what you will need to start to secure revolving cash credit:
Make sure you have 10 payment experiences reporting to the business credit reporting agencies.
Ensure that at least one of your reported accounts has a high limit of at least $10,000.
Ensure you have an established business credit profile and score with at least D&B and Experian.
Locate the cash credit where you want to apply for credit. These types of accounts are not readily available, so you will need to do some research to find out who can give you cash credit for your EIN not linked to your SSN.
Contact them by phone, or check their website, and find out how to apply for each source to get credit for your business.
Do research, even ask each source if they know what is needed or required for approval. Many will require that you have an established business credit profile and good score for approval with 10 reported payment experiences and at least one account with a limit of $10,000 or higher for approval.
Complete the cash credit business application and leave your SSN off the application. Please note, ALL applications will ask for your SSN. But with established business credit they will pull your EIN credit instead, and if it meets their requirements then they will approve you anyways… without your SSN even being supplied, which means there is no personal guarantee offered.
Use your new credit to purchase wanted or needed items for your business.
Pay your bill timely, preferably early. Remember, your business credit scores look mostly at how you pay the bill, early or late.
Make sure to pay your bills as soon as your bill is received.
Check your business credit reports to ensure your new accounts are reporting. D&B claims this can take between 1-3 reporting cycles, or 30-90 days. Monitor your reports until you verify your new items are reported.
By using this checklist and following the steps outlined you will have established your business credit. And you will have a lot of real, useable credit that you can use to start, build, and grow a successful business. Now you will want to continue finding store and cash credit, applying, using the credit, and paying your bill to continue growing your business credit and credit limits. The more you do this the higher your limits will be, and the more lenders will want to issue you credit and financing for the growth of your business. We wish you the best on your mission to get credit to grow your business and join the ranks of the most highly successful businesses in the country. Here’s to your success!
Credit Suite Inc. (877) 600-2487 www.CreditSuite.com